Why M&A Due Diligence Misses 83,195 Multi-Agency Employers

The Entity Resolution Gap in Labor Due Diligence

When an M&A team runs labor due diligence, they typically search each federal agency database separately: WHD for wage violations, OSHA for safety citations, NLRB for union activity. Each search uses the target company’s legal name, maybe a known DBA or two.

The problem is that federal agencies don’t share a common employer identifier. The same company can appear as “Acme Industries LLC” in WHD records, “Acme Industries” in OSHA, “Acme Industries, Inc.” in NLRB filings, and “ACME INDUSTRIES HOLDINGS CORP” in SEC EDGAR. Throw in DBAs, trade names, and franchise locations, and a single employer can have dozens of distinct records across agencies—none obviously linked to each other.

What Cross-Agency Linking Reveals

LaborAudit’s Bayesian entity resolution engine uses probabilistic name matching, address clustering, and NAICS-industry signals to link records across all four agencies into a single canonical employer graph of 2.3 million entities. The results are striking:

83,195 Employers with Multi-Agency Exposure

After entity resolution, 83,195 employers have enforcement actions from two or more agencies. Of those, 3,347 have actions from three or more. These multi-agency employers are invisible to searches that check one agency at a time unless the analyst already knows every name variation.

This is the gap that standard M&A due diligence misses. A target company’s clean OSHA record may simply mean the OSHA violations are filed under a DBA that wasn’t included in the search. The WHD investigation may be under a subsidiary name that doesn’t appear in the acquisition agreement.

The Subsidiary Problem: 95,406 Hidden Risk Carriers

SEC EDGAR filings (Exhibit 21) disclose 95,406 subsidiaries across 1,590 parent companies in our database. We linked 14,099 of these subsidiaries to enforcement records in WHD, NLRB, or OSHA—enforcement activity filed under subsidiary names that would never appear in a search for the parent company.

For acquirers, this means the target’s labor enforcement profile may be dramatically understated. The parent entity looks clean, while enforcement risk sits in subsidiaries, DBAs, and former trade names scattered across agency databases.

• 95,406 SEC-disclosed subsidiaries across 1,590 parent companies
• 14,099 subsidiaries linked to federal enforcement records
• 68,362 employer–SEC linkages in the canonical graph
• Average parent company has 60 subsidiaries—each a potential enforcement record carrier

The 2024 DOJ-FTC-DOL-NLRB MOU and Merger Review

In 2024, the DOJ, FTC, DOL, and NLRB signed a Memorandum of Understanding committing to share labor enforcement data during merger review. Under the MOU, the DOJ and FTC can request an acquirer’s full labor enforcement history—including subsidiaries—from DOL and NLRB as part of antitrust review.

This means labor enforcement history is no longer just a compliance matter—it’s a deal risk. An acquirer that fails to identify subsidiary-level OSHA violations or WHD back-wage orders may face surprises during regulatory review that delay or derail the transaction.

The practical implication: M&A labor due diligence must now include cross-agency, cross-entity searches that cover every subsidiary, DBA, and trade name in the corporate family tree. Manual searches across four separate agency databases are no longer sufficient.

CSDDD and Supply Chain Liability

The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) requires in-scope companies to identify and mitigate human rights and environmental risks across their value chains. For US-linked supply chains, this means mapping federal enforcement actions against suppliers and their subsidiaries.

LaborAudit’s ESG framework mapping covers 43 indicators across four frameworks (GRI, SASB, UNGP, CSDDD). Multi-agency enforcement data maps directly to CSDDD Article 6 (identifying adverse impacts) and Article 7 (preventing adverse impacts). An employer with cross-agency enforcement history—especially the OSHA → WHD → NLRB escalation pattern—is a high-priority due diligence target under CSDDD.

Closing the Gap

The core problem is fragmentation: employer records spread across agencies with no common identifier, subsidiary structures buried in SEC filings, and enforcement actions filed under names that don’t match the acquisition target. Entity resolution is the only way to close this gap.

For M&A lawyers: request cross-agency enforcement reports covering the target, all subsidiaries, and known DBAs. A single-agency search is no longer defensible due diligence.

For ESG consultants: CSDDD Article 6 compliance requires mapping enforcement actions across the full corporate family tree. Subsidiary-level enforcement data is not optional.

For compliance officers: monitor multi-agency employers proactively. An employer with OSHA citations today is significantly more likely to face WHD and NLRB actions within 36 months.